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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, D.N. RAY, JJ.
Anjanaben R. Shah S/o Late Rajesh Suryakant Shah - Petitioner
Versus
Principal Commissioner of Income and Another - Respondents
Special Civil Application No. 14843 of 2023
Decided On : 04-03-2025
(A) Income Tax Act, 1961 - Sections 144, 147, 148, and 264 - Quashing of assessment order - The petitioner challenged the assessment order on grounds of lack of valid service of notice under section 148, which is jurisdictional for the assessment - The court found that the notice was never served, rendering the assessment order invalid. (Paras 24-28)
(B) Jurisdiction - The court emphasized that valid service of notice is essential for the Assessing Officer to assume jurisdiction, and failure to serve notice invalidates the assessment proceedings. (Paras 16, 24)
Facts of the case:
The petitioner, the legal heir of a deceased NRI, contested an assessment order claiming that notices were not served, leading to an invalid assessment.
Findings of Court:
The court ruled that the assessment order was invalid due to non-service of notice under section 148, and remanded the matter for fresh consideration.
Issues: The main issues were whether the notice under section 148 was served and the validity of the assessment order based on that service.
Ratio Decidendi: The court held that the absence of valid service of notice under section 148 is fatal to the assessment order, emphasizing the importance of jurisdictional notices.
Result: The impugned order was quashed and the matter remanded for fresh consideration.
JUDGMENT :
BHARGAV D. KARIA, J.
1. Heard learned advocate Mr. Manish J.Shah for the petitioner and learned advocate Mr. Rudram Trivedi for the respondent.
2. Rule returnable forthwith. Learned advocate Mr. Rudram Trivedi waives service of notice of rule on behalf of the respondent.
3. By this petition under Article 227 of the Constitution of India, the petitioner has prayed for the following reliefs:
“A) this Hon'ble Court be pleased to call for the records of the proceedings, look into them and be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing the order of Respondent No.1 dated 24.03.2023 at Annexure-G and order of Respondent No.2 dated 04.11.2019 at Annexure-A and further be pleased to quash the demand notice issued u/s.156 dated 05.11.2019 at Annexure-B.
B) Pending the hearing and final disposal of this application, this Hon'ble Court be pleased to stay the recovery of demand arisen in pursuance of issuance of notice u/s.156 of the Act at Annexure-B.
C) this Hon'ble Court be pleased to grant any further or other relief as this Hon'ble Court deems just and proper in the interest of justice, and
D) This Hon'ble Court be pleased to allow this application with costs against the respondent.”
4. Brief facts of the case are that the petitioner is a legal heir and wife of late Rajesh S. Shah who was a Non Resident Indian and settled in United States of America since last 15 years and before that he was working with the Telecom department in India. Late Rajesh S. Shah had left India in the year 2004. It is the case of the petitioner that late Rajesh S. Shah did not have any taxable income in India and therefore, he had not filed return of income for any subsequent years.
5. The petitioner and her late husband had a joint bank account bearing No. 534202010000261 maintained with the Bank of India and also having Bank account with the State Bank of India. In the bank account maintained with the State Bank of India, the petitioner and her late husband had bank deposits which were encashed/withdrawn in the Financial Year 2011-2012 relevant to Assessment Year 2012-2013 when the petitioner along with her late husband visited India to meet her aged father-in-law who was not keeping well at that time.
6. In the year 2020, the bank account of Late Rajesh Shah was debited with an amount of Rs.11,48,070/- on 12.03.2020 when he was in USA. It is the case of the petitioner that on coming to know about such debit, her late husband had inquired the reason about such debit and came to know that the said amount had been withdrawn by the Income Tax department in pursuance of the assessment order which was received by brother of late Rajesh Shah on 13.03.2020. Meanwhile, late Rajesh Shah was not well and passed away on 17.04.2020.
7. The petitioner on perusal of the assessment order passed under section 144 read with section 147 of the Act dated 4.11.2019 came to know that addition of Rs. 18,25,000/- was made by treating the cash deposit of the same amount as unexplained cash deposit under section 69A of the Act and on the basis of said order, a demand of Rs. 11,48,070/- was raised by issuing notice under section 156 of the Act dated 5.11.2019.
8. It is the case of the petitioner that the petitioner and her late husband became aware about such order only on 13.03.2020 when brother of her late husband had collected the said order from the officer of the Income Tax department after the debit of amount from the bank account on 12.03.2020.
9. It is the case of the petitioner that due to spread of Covid-19 pandemic, the petitioner could file the revision petition under section 264 of the Act dated 23.02.2022 only on 24.02.2022 before respondent no.1 praying for setting aside the assessment order.
10. In pursuance to the revision petition under section 264 of the Act, the petitioner made a detailed written submission to respondent no.1 vide email dated 01.03.2023 followed by another mail dated 01.03.2023 to Deputy Commissio
Valid service of notice under section 148 is essential for jurisdiction; failure to serve invalidates the assessment order.
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Issuance of notice u/s.143(2) is mandatory and sine qua non for valid reassessment u/s.143(3) r.w.s.147; its absence renders assessment void ab initio.
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The legal service of notice under the Income Tax Act, 1961 is a jurisdictional requirement and must be mandatorily complied with. Failure to serve notice on the correct registered email address of th....
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